Budget 2026: FM extends ITR deadlines, simplifies TDS on NRI property sales. Details here

The Union Budget 2026 brings relief to taxpayers with extended timelines for filing Income Tax Returns (ITRs) and simplified compliance measures for non-resident property transactions.

Finance Minister Nirmala Sitharaman announced staggered ITR deadlines, easier TDS procedures on property sales by NRIs, and rationalised TCS rates under the Liberalised Remittance Scheme (LRS).

"It is proposed to provide a staggered timeline for the filing of tax returns due on the 31st of July. Individuals filing ITR 1 and ITR 2 shall continue to file tax returns by the 31st July, and for non-audit business cases or trusts, 31st August shall be the due date," said FM Sitharaman while presenting Union Budget 2026.

The proposal to allow resident buyers to deduct and deposit TDS on property purchases from non-resident sellers using a PAN-based challan is a welcome rationalisation of the compliance framework.

"By removing the requirement to obtain a separate TAN for what is often a one-time transaction, the government has addressed a long-standing pain point that caused delays, confusion and procedural burden. The move aligns the treatment of non-resident and resident property transactions, improves ease of compliance, and should significantly reduce administrative friction for taxpayers without diluting tax oversight,” said Rajarshi Dasgupta, Executive Director - Tax, AQUILAW.

"The new provision for TDS on immovable property sales by non-residents simplifies compliance by allowing deduction and deposit through the resident buyer’s PAN, removing the need for a separate TAN. This streamlines administration, reduces paperwork, and lowers procedural barriers for both buyers and non-resident sellers. By making the process more user-friendly, it could encourage transparency in high-value property transactions," said Manmeet Kaur, Partner at Karanjawala & Co.

Finance Minister Nirmala Sitharaman on Sunday proposed a six-month foreign asset disclosure scheme for small taxpayers like students, tech professionals and relocated NRIs as she presented the Union Budget 2026-27.

She said there will be no interest liability on taxpayers on the penalty amount for the period of appeal before first appellate authority, irrespective of outcome.

The finance minister also proposed exemptions of three years for dividend income received by notified cooperatives on investments made up to January 31, 2026.